UNIT TRUST OF INDIA vs SUDHIR GANPATRAO CHAUHAN

THIS Revision Petition has arisen out of the order dated 3.12.1993 of the State Commission, Maharashtra at Bombay upholding the order dated 25.6.1993 of the District Forum, Solapur awarding Rs. 10,000/- as compensation with costs of Rs. 100/- payable to the Complainant by the Opposite Parties, jointly and severally.

THE facts lie in very narrow compass and may be noticed. The Complainant was an investor under the Units Scheme-64 of the Unit Trust of India (Petitioner herein � for short called UTI). The Complainant was eligible to apply for another scheme announced by UTI called UGS-2000. The Opposite Party No. 2 at the relevant time was UTI''s Chief Representative of Solapur District. The Complainant''s case is that he has submitted 5 applications to UTI for purchase of 1000 units of Rs. 10/- each under UGS-2000 scheme and paid the application money of Rs. 10,000/-, by way of Cheque No. 15080 dated 23.10.90 for Rs. 8000/- drawn on Solapur Merchant Co-operative Bank, Solapur in favour of Shri S.G. Godse, Opposite Party No. 2 and also paid a sum of Rs. 2,000/- in cash against receipt of Shri S.G. Godse. The Complainant further asserts that Opposite Party No. 2 paid the amount to UTI through his cheque No. 353706 dated 15.J11990 through Sangli Bank but UTI did not issue the units despite reminders and personal visits to Pune office. The Complainant has alleged deficiency in service of the Opposite Parties and prayed for a direction to issue necessary share certificates or in the alternative to refund the amount of Rs. 10,000/- with interest at the rate of 21% per annum. The complaint was contested by UTI but Opposite Party No. 2 remained absent. The case of UTI is that the Agents/Chief Representatives of the UTI are only authorised to collect applications along with cheques/demand drafts payable to the UTI from the investors for the purpose of investment in various schemes of the Trust and that the Agents/Chief Representatives are not authorised to accept the subscription in cash under any circumstances from the investor. It is stated that contrary to the prescribed procedure regarding deposit of money with UTI, the Complainant has paid the money for the applications under UGS-2000 to Shri S.G. Godse, the then Chief Agent of the UTI of Solapur. It is further stated that as regards cheque No. 353706 dated 15.11.1990 for Rs. 20,000/- drawn on the Sangli Bank Ltd., Pune by the Second Opposite Party in respect of various applications collected by him from the investors including those of the Complainant for the purpose of investment in UGS-2000 Scheme of the UTI, the same was returned unpaid by the bankers with the remark "Refer to Drawer". Accordingly, the applications deposited by the Second Opposite Party including those of the Complainant were duly cancelled by the UTI as the amounts were not received.

THE District Forum Solapur came to the conclusion that Shri Godse had accepted a cheque of Rs. 8,000/- and the amount of Rs. 2,000/- from the Complainant for UGS-2000 on behalf of the Opposite Party No. 1 and accordingly issued the receipts to the Complainant but the Opposite Party No. 1 is delaying the matter and avoiding the responsibility in this case. It was found that Shri Godse acted as agent of Unit Trust of India and accepted cheque and cash for Unit Trust of India and did not provide the service to the Complainant as per agreement. The District Forum directed the Opposite Parties to pay, jointly and severally Rs. 10,000/-with costs Rs. 100/- to the Complainant. The appeal of the UTI was dismissed by the impugned order dated 3rd of December, 1993 of the State Commission, Maharashtra at Bombay.

A specimen copy of the letter of offer-cum-application for Unit Growth Scheme-2000 (UGS-2000) is on record. It contains inter alia, that the applicant has carefully read the letter of offer and the instructions contained therein and agreed to abide by the provisions of Unit Growth Scheme-2000 and UTI''s decision in matters relating to allotment shall be binding on the applicant. In the instructions the mode of payment is provided. The payment for units applied for can be made by cash /cheque or draft. When the application is tendered at the 3ranch Office of the Trust or Collection Centre with a cheque/draft, the cheque/draft has to be made payable to "Unit Trust of India" and crossed "A/c Payee". When application is tendered at a branch of agency bank, the cheque or draft should be made payable to that agency Bank. The Trust Office /bank receiving the application and the money will acknowledge the receipt of the same by initialling and returning to the applicant the acknowledgement slip. Alternatively the investors can tender their applications along with the Bank Draft at Chief Representative''s Collection Centres at selected Districts. It would be seen that the Unit Trust of India has not authorised its agents to collect cash, nor are the investors permitted to draw cheques in the name of the agents for remitting o UTI. The Agents/Chief Representatives of he Trust are only authorised to collect applications along with cheques/demand drafts payable to the Unit Trust of India. The finding of the District Forum as well as of the State Commission that Shri S.G Godse was the authorised Agent and therefore, the UTI is esponsible for the acts of omission and commission committed by the Agent of the UTI is not supported by the material on record. The authority that is conferred on the Agent or Chief Representative was only to collect applications from the investors along with cheques/drafts made payable to "Unit Trust of India" and crossed "A/C payee". In taking the cheque in his own name or by accepting cash from the Complainant, Shri Godse has manifestly acted contrary to the instructions of the Unit Trust of India as well as to the mode of payment prescribed in the letter of offer-cum-application for UGS-2000. The Complainant has signed the applications that he had read the letter of offer-cum-application and the instructions contained therein which also includes the mode of payment. The Complainant himself has been grossly negligent in issuing the cheque in the name of Shri Godse contrary to the mode of payment provided as also to the payment to him in cash. The acceptance of the cheque drawn in favour of Shri Godse and the receipt of cash of Rs. 2000/- is wrongful act of Shri Godse and beyond the scope of limited authority conferred on him and for the consequential loss to the Complainant arising therefrom, the liability will be only of the Agent and not of the UTI, the principal. There is no vicarious liability on the facts and circumstances of the case of the Unit Trust of India. There is thus no deficiency in service by the UTI with /the result that the District Forum as well as the State Commission had no jurisdiction to grant the reliefs against the Unit Trust of India. The Revision Petition is accepted and the orders of the State Commission and the District Forum are modified to the extent that the complaint against the UTI would stand dismissed leaving the parties to bear their own costs.